Wheel tax survives initial talks

JANESVILLE  A $10 wheel tax in Janesville is closer to reality after remaining in the 2012 budget after a council discussion Thursday.

The council continues to meet on the budget, with its next study session scheduled Tuesday.

The tax would be levied on each automobile and lightweight pickup registered in the city. The state would add the $10 tax when it collects its $75 license fee. The state would take 10 cents for its trouble.

The $550,000 collected would be used to maintain streets and offset property taxes.

The council could still delete the tax from the proposed budget, but that appears doubtful. Finding the $550,000 would not be easy, and council members expressed little desire to dip further into reserves or cut services.

City Manager Eric Levitt said a wheel tax diversifies the city's revenue. The state has capped the amount the city can raise via property taxes. And state shared revenues continue to drop.

Four governmental units in the state have a wheel tax: Beloit, Mayville and St. Croix County have wheel taxes of $10, and the city of Milwaukee has a wheel tax of $20. State lawmakers are considering legislation to require cities to hold referendums before approving wheel taxes.

Councilman George Brunner said a business owner with many automobiles told him he liked the idea of a wheel tax because the money is earmarked for street maintenance.

Councilman Yuri Rashkin pointed out that the city has the option to borrow because the state does not cap borrowing, but Rashkin did not endorse more borrowing.

But Levitt said the city could borrow only about $360,000 for street reconstruction. While the state caps the city's operating budget, it does not cap borrowing for capital projects.

The city could not borrow the remaining $190,000 because that covers routine maintenance such as patching potholes.

Brunner said the state has relatively low vehicle fees compared to other states, but that doesn't meant the state won't eventually raise them.

Councilman Russ Steeber worried about any negative effect on the city's economic development. The tax might be a deterrent, for example, for a business with many vehicles.

"Any tax we put in can have an adverse impact as far as economic development," Levitt said.

Last year, the council added a $40 trash collection fee, Steeber said.

"The perception of people I talked to is, 'When are you going to stop hitting us up?' The buzz is, we're just looking to reach into people's pockets at another level," Steeber said.

Still, Steeber said he doesn't see much other choice because of the state cap and dwindling state shared revenues.

"I don't have a problem taking the heat for doing it," he said. "We have to survive in this climate we have right now."

The only other option is to cut services people take for granted, he added.

"I want people in the community to be aware, we're not doing this to get into people's pockets more," he said. "We're doing this to keep the quality of life and a level of service at an acceptable point."

Council member Kathy Voskuil said the council is being fiscally sound and looking out for the community by passing a wheel tax.

"I don't want to borrow the money," she said.

Janesville has always been fiscally conservative, Brunner said. But its sources of revenue are drying up, such as the revenue the landfill used to get from large waste haulers.

"We're running into a stone wall as far as revenue is concerned and how things are funded," he said.

"It's a matter of, do we collect garbage?" he said. "Do we maintain the streets? How much more do we borrow?